Singapore's United Overseas Bank and Prudential Corporation Asia have set up a regional bancassurance partnership, whereby Prudential will sell its insurance products through UOB's retail network.

In conjunction with the alliance, UOB will sell UOB Life Assurance to Prudential for a total consideration of S$428 million ($306 million). The deal is expected to complete by the end of January. HSBC advised UOB on the transaction, while Prudential was advised by Citi.

Under the arrangement, UOB in Singapore and its subsidiaries in Indonesia and Thailand -- UOB Buana and UOB (Thai) -- will distribute Prudential's life, accident and health insurance products for an initial term of 12 years.

The insurer chose to partner with UOB due to the latter's scope and scale of operations in the region, says a Prudential spokesman. The bank is one of the largest in Southeast Asia, with more than 400 bank branches across the three markets.

Moreover, in Indonesia and Singapore, Prudential's distribution is agency-led, says the spokesman; for example, it has 85,000 tied agents in Indonesia, although it also has bank and non-bank distribution channels. The firm is a top-three player in the Indonesian and Singaporean life insurance markets by annual premium equivalent, he adds, and the agreement will further boost its distribution capabilities with a very strong bank network.

In Thailand, Prudential mainly sells its life insurance products through direct and telemarketing channels. Hence, the addition of the bancassurance partnership with UOB (Thai) will also substantially increase the scale of its operations there.

Prudential employees will be stationed at UOB branches to provide expertise on insurance sales management, staff training and customer support.

The alliance will also strengthen UOB Group's regional insurance-distribution capability and to accelerate the growth of its bancassurance business with a well established and credible partner, adds the statement. Customers in the three countries will also thereby gain access to Prudential's portfolio of insurance products.

There have been other bancassurance tie-ups in the region in recent months. In late December, Mumbai-based IndiaFirst, a life insurance joint venture with a bancassurance model, was set up by Bank of Baroda, Andhara Bank and the UK's Legal & General. And in November, the Philippine American Life and General Insurance Co (PhilAm Life) and the Bank of the Philippine Islands (BPI) formed a strategic life-assurance JV through the sale of BPI's 51% stake in Ayala Life Assurance. The JV has been renamed BPI-Philam Life Assurance Corp. Philam Life is the country's largest life insurer.